SOURCE: Rydex Investments

April 11, 2006 16:18 ET

Rydex Investments Receives IRS Private Letter Ruling for Commodities Fund

Ruling Will Enable Advisors and Investors to Access Commodities Sector via Rydex Commodities Fund, Which Will Also Waive Fees

ROCKVILLE, MD -- (MARKET WIRE) -- April 11, 2006 --Rydex Investments announced today that its Rydex Commodities Fund has received a private letter ruling from the Internal Revenue Service that will enable the fund to continue to meet the investment objective of the fund going forward.

The Rydex private letter ruling comes on the heels of a December 2005 IRS ruling that certain income from commodity-linked swaps were not considered qualifying income after June 30, 2006. In the past three months, Rydex Investments has explored alternative methods to provide investors with access to the commodities market via its mutual fund offering. The answer came in the form of commodities-linked structured notes, which provide mutual funds with a tax-appropriate vehicle to gain exposure to a commodities index.

Commodities rarely move in conjunction with stocks or bonds. As a result, when added to a portfolio in small doses, they can smooth out a portfolio's volatility. In addition, they may provide protection against inflation, which is often accompanied by a rise in commodity prices. "Commodities have been a popular asset class in recent years, as investors seek to diversify their portfolios. We're pleased to be able to continue to offer investors a convenient and cost-effective way to access this asset class," commented Jim King, director of portfolio management, Rydex Investments.

Rydex Also Waives Fees for Commodities Fund

Due to the move to industry-linked notes, Rydex will no longer be able to offer unlimited trading on Rydex Commodities Fund. Consequently, Rydex Commodities Fund will waive 35 bps of its management fees until June 30, 2007, capping the fund's total expenses at just 1.20%. Jim King comments, "The fee reduction is a big advantage for investors who want to access this segment of the market."

About Rydex Investments

Rydex Investments continues to drive change in the financial industry by introducing investment products and services that challenge conventional thinking, empower investors and provide essential new options for uncertain market conditions. Rydex manages $14 billion in assets via more than 60 mutual funds and exchange traded products. For more information, call 800.820.0888 or visit

For more complete information regarding any Rydex fund please call 800.820.0888 for a prospectus. Investors should consider the investment objectives, risks, charges and expenses of a fund carefully before investing. The fund's prospectus contains this and other information about the fund. Please read the prospectus carefully before you invest or send money.

The Rydex Commodities Fund is subject to a number of risks and may not be suitable for all investors. The Fund's exposure to the commodities market may subject the fund to greater volatility as commodity-linked derivative investments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates or factors affecting a particular industry or commodity. The Fund's use of commodity-linked derivative investments may expose the fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. To the extent that the fund's investments are concentrated in energy-related commodities, the fund is subject to the risk that this sector will underperform the market as a whole. These risks may cause the Fund to experience higher losses and/or volatility than a fund that is diversified, invests in traditional securities or that does not use derivatives. Also, the Fund is subject to active trading risks that may increase volatility and impact the Fund's ability to achieve its investment objective. See the prospectus for more details.

Securities are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested.

Rydex Distributors, Inc., an affiliate of Rydex Investments, is the distributor of the Rydex funds.

Contact Information